State pays Sh10.8bn in interest due to $2bn Eurobond

The government has paid $68.7 million (Sh10.8 billion) in interest of the $2 billion (Sh313bn) Eurobond. 

In a statement on Thursday, Treasury Cabinet Secretary Njuguna Ndung'u said they are committed to fulfilling all debt obligations with international lenders.

He attributed the interest payment to the prudent use of revenue collections, reiterating that the country is dedicated to meeting external obligations.

The CS said paying the December interest in time is a message to investors on Kenya's commitment to settling debts.

"It has also resulted in a reduction in yields on Kenya's Eurobonds in the global financial markets," he added.

At the same time, Ndung'u noted that the state plans to pay the final interest by the end of June 2024.  

"The final interest payment on this Eurobond is scheduled for the last week of June 2024, alongside the repayment of the principal amount of US$2 billion," he said.

He stated that the state has, since July, diligently implemented a comprehensive plan for debt service payments.

This includes combining revenue and concessional financing to retire high-cost debts within the national debt portfolio.

"Substantial external inflows from the World Bank, IMF and other Development Finance Institutions, in addition to key bilateral partners, are anticipated between January and March 2024," he added.

Ndung'u said the inflows are poised to significantly bolster foreign exchange reserve levels.

He added that the preliminary revenue collection outcome for the last six months ending December reflects an impressive turnaround.

This is considering that there was a slow start in the collection at the beginning of the fiscal year.

He said the same was arrived at, following the government's tax policy and administrative reforms.

The CS added that the ongoing fiscal consolidation plan, driven by revenue generation, aims to curtail borrowing, reduce debt levels over the medium term, and ultimately enhance the well-being of Kenyans.